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Gas and oil prices soared in US as Iran halted some crude exports. Investors predict that the energy demand will rise as Europe moves closer towards bailing out Greece. Analysts warned that oil speculation might also push prices higher along with the Iranian situation. It is predicted that Iran’s stand would have negligible impact on supplies as only 3% of Iranian oil goes to France and UK has not imported oil from Iran in six months. The real impact of Iran’s s announcement would be on oil prices which in turn would affect gasoline prices worldwide.

The prices reflect the mounting tension between Iran and the West. Halting tiny amount of crude exports poses no threat to Iran. Indeed, it has managed to claim headlines and resulted in soaring prices worldwide. Iran, would encourage the resulting price rise.

The Iranian stand brought forth many predictions regarding gas prices. One of them was that gas price would rise to $5 a gallon by summer. Respected analysts claim this prediction as futile and nonsense. Analysts predict that the gasoline prices would hover between $3.75 to $4.25, when they peak during spring.

Iran’s move was in retaliation to the sanctions imposed by the EU and US on its nuclear strategy. Around 18% of Iran’s oil export goes towards countries in the EU. The EU states that the disruption of supply from Iran will be of little consequence, since it has stockpiled sufficient supplies of oil and petroleum products.

The West fears that Iran is using nuclear strategy to develop atomic bombs. Iran denies the charge and claims it is for peaceful purposes. The West is unconvinced and has imposed sanctions to discourage Iran.

Oil prices also soared as a result of the hope created by the Greece bailout and China’s decision to boost money supply. The ratio that banks must hold as reserves has been lowered. This moves frees tens of billions of dollars into the market.

If anyone has really benefited from United States natural gas drilling boom, they are the chemical companies who have long depended on overseas gas sources. As natural gas surplus drives down prices to a 2-year low, chemical companies are making the most of it by reopening closed down plants and building new ones.

Rural communities around the U.S. who were until now, enjoying a peaceful life now have petrochemical companies clinching their lands to convert them them into industrial zones, since local gas supplies at cheap rates is now a possibility.

Local businesses in Charleston, West Virginia are influencing officials to bring a new chemical plant called ethane cracker which could create several hundred jobs at the facility. Nearly, 2,000 construction workers would be initially sourced to build the facility. The plant will “crack” ethane into ethylene to produce various products of daily wear, right from cushions to clothes. Nearly, 40-60% of products used everyday are made from chemicals such as ethylene.

Regions such as Marcellus Shale are particularly rich in ethane, containing as much as 14 to 16 percent of the chemical compound. Firms in U.S. states and from Canada are vying to cash in on the ethane-rich Marcellus Shale boom.

However, environmental groups are wary of this expansion since it will be at the cost of public health and environment.

After examining European cities sub-zero conditions, the ministers of Italy warned to raise prices in order to hold alarming critical shortages of gas. Following such circumstances, the United Kingdom for the first time became the biggest supplier of gas to France. Germany, which was once the biggest exporter of electricity to France, drew back because of plunging temperature of -12°C in Berlin.

Up to 10 per cent reduction by Russia in gas exports have immensely influenced supply, along with sinking temperature of -10°C in Moscow inflicting injury to ongoing gas crunch.

ICIS Heren, analysts at gas market intelligence company said that the wholesale gas prices for upcoming delivery will hit 93p a therm in frenetic trading, which is marked the highest since March 2006.

One major reason for spiking prices is a result of the increasing sources of natural gas available in the United Kingdom, which were not around six years ago. The Milford Haven and the Isle of Grain are main liquefied natural gas import terminals. However, many Russian ships are unable to leave ports with gas supplies.

Overall estimates depict that the UK’s leading offshore gas storage facility is providing a maximum 45 million cubic meters (cu m) of gas into the UK’s network for the past five days. The Centrica-owned facility, 18 miles off the Yorkshire coast, is currently two-thirds full, containing 2.3 billion cu m of natural gas.

According to National Grid data, regular demand for liquefied natural gas was expected to be around 396.6 million cu m, which was 68 million cu m above the seasonal norm. However, the shortage of 13.4 million cu m means the demand from withdrawing from storage.

“There is an element of panic out there at the moment. People are expecting the price to be 20p lower next week, if this cold spell remains [the high prices] could continue. The cold weather will hit everywhere from Spain all the way to Russia,” said ICIS Heren’s Ed Cox.

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Jessica Brady, the spokeswoman of AAA said that the state average per gallon was $3.55 on 30th of January 2012, which climbed up to 6 cents the last week.

Brady said: “Florida’s average is the highest that we’ve seen at this time of year, at least as far back as … the year 2000.” She added that “Consumers are likely to see gas prices increase again this week.”

On 27th January 2012, it was striking to know that Oil barrel prices soared around $ 100 in the commodity market.

Brady said that such hair-raising prices might be good for the world financial markets. However, it is a concern for several refineries across the nation as well affecting total domestic output. She added that various shutdowns are because of irregular maintenance, lack of profits as well as repair.

With an average price of $ 3.15 at the Jacksonville metro area, Brady said that it is difficult to say that how much price will increase in the future.

The American Automobile Association, Inc. remarked that the Last week’s national average of more than $3.40 per gallon set the first time record in nearly three months price rise to a notable level. The domestic prices on gas on 30th of January 2012 significantly dropped less than all the time high of $4.08 per gallon as noticed in July 2008.

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The effort by Oklahoma City-based Chesapeake, which is the famous producer of the United States gas output up to 9%, gas prices and producers’ shares billowed up to 10%.  The company has planned to inactive 24 natural-gas rigs by the second quarter to follow 69% reduction from 2011.

Michael Hall, an analyst with Robert W. Baird & Co. said that the attempt might be for a short period, but this will promote many producers to maintain output. Hall said: “Excess supply, even after curtailments in production and activity, is likely to return quickly to the market in the event of a price recovery.”

Chesapeake pointed out that this initiative will minimise expenses on gas wells to $900 million in 2012 compared to $3.1 billion in 2011.

On 23rd January 2012, gas prices for February delivery soared 18.2 cents to settle at $2.525 per million British thermal units. However, the prices on gas have drastically fallen down 50 percent for the next-month delivery in the 12 months ending on 20th January 2012.

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UK is totally dependent on Qatar for its gas supplies. This dependency may create havoc in the upcoming days for UK’s gas market. At present, Iran is threatening to block the strategic Strait of Hormuz waterway, which is essential for the gas exports. However, this is not only the dark cloud looming over the UK gas industry. As opposed to other European nations, Britain has not made long term gas contracts. Of all the gas coming to UK from Qatar, only 24% comes under fixed contracts. This means that the remaining is sold at any time to the highest bidder in the international market by Qatar.

The gas from the North Sea in the UK has slowed down as a consequence of aging fields and lack of channelised investments. From 2010 to 2011, 64% of the UK gas came from Qatar. Meanwhile production of gas in the UK has fallen down by 6.2% since 2005.

After Qatar, Norway was the second largest supplier of LNG to Britain. However, gas from Norway decreased to 17% as a result of competition from other customers like Argentina and South Korea.

In spite of the British government’s aim to secure gas from diverse sources, its dependency on Qatar gas has increased steadily. Qatar is now responsible for 30% of the total global LNG. The North Field has been developed so successfully that Doha has imposed a moratorium on it’s development till the year 2015. Qatar has also made long term contracts with Taiwan and Thailand. It has also commenced selling spot exports to Japan, as Japan is scavenging the LNG market to cover the demand caused by shutting down of its nuclear plants.

In such a scenario, it is imperative for the UK to find alternative gas suppliers. There are much hurdles in achieving this objective. The new LNG from the Atlantic basin is limited to Algeria and Angola, both of which have critical supply constraints. The fact that the UK faces more competition for LNG from South American States, makes the problem even more challenging.

To ensure a secure gas supply in the long term, the UK has to find alternative suppliers of gas and start cutting down on its gas shipments from Qatar. Japan too is entirely dependent on other economies for oil and gas supply. However, it is in a much favourable and secure position than the UK because of its diverse suppliers.

There is an oversupply of gas in Europe during winters. The mild temperatures have lowered household energy prices. In such a scenario, it is highly unlikely that the government will seriously tackle the ever expanding energy security crisis. This is a temporary relief especially as the blocking of the Strait of Hormuz looms on the horizon.

Jeffrey Spring of the corporate communications department of AAA Southern California said: “We are higher than we were last year, about 30-cents a gallon higher than we were last year.”

Spring said that the price rise is normal for January. He added that the condition will persist because of uncertainty in the Middle East, which is about to mix a bitter spice in towering gas prices. This will add extra burden to the prices on gas by implementing a higher tax structure as a result of overall increase.

California’s average gas price is $3.68 per gallon compared to the national average of $3.40. Los Angeles’ average is $3.73 a gallon, the highest among all.

Rising gas prices have influenced all types of businesses, especially which are related to transportation where everything relays on the vehicles. If such a situation will persist for a longer period, it will harm all sphere of life, particularly business associated with deliveries.

Spring added: “Some analysts are saying it could go 50 to 60 higher but we will have to see.” One best way to save money is to maintain car in good condition.

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After a series of earthquakes over the past year, including the 4.0 magnitude on Saturday, Ohio officials in wake of public safety have decided to suspend operations at five fluid injection wells for an indefinite period.

Over the past year, Youngstown has suffered 11 earthquakes possibly a result of a close relation between an unknown fault line and the well’s location. According to the The Ohio Department of Natural Resources, it was stopping operations at five Mahoning County wells owned by Northstar Disposal Services LLC as a precaution since geologists are of the opinion that the fluid disposal could be aggravating the fault line, causing earthquakes.

In the past, human triggered earthquakes have been documented in United States, Japan and Canada. Similar to the Youngstown example, is the 5.5 magnitude earthquake of 1967 at the Rocky Mountain Arsenal near Denver, Colorado where hydraulic fracturing is the suspected cause.

Youngstown is not prone to earthquakes and the last seismic record goes back to the 1980′s. However, this year a 2.1 magnitude earthquake was recorded on March 17, 2011 followed a series of quakes in August, September, October, November and December.

The latest 4.0 earthquake on New Year’s eve at 3:05 pm got the balls rolling as officials decided to take an immediate step to stop all operations.

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Since a long time ago, the U.S. has been using natural gas for heating purposes, as offices and homes became more energy efficient.As of now, there is plenty of natural gas in the marketplace with abundant sources but the demand is comparatively less. The expert quotes that it is very important to find the ways where gas can be utilized. Amongst the thoughts, power generation is the obvious and beneficial option where the natural gas can be used.

According to Baker Hughes, which tracks rig counts, the fully operational drilling rigs in North American gas fields have fallen down by 14 percent. The experts in the industry say that the gas industry is indicating blooms and growth. Electricity generators are being encouraged to use gas as an alternative to coal for generating electricity.

AP / Svetlana Kozlenko

The usually warm weather in this fall has caused SaskEnergy to extend the monitoring of its gas leaks. SaskEnergy is especially concerned about the gas leaks issues as they were leaks from natural gas pipelines in the south of Regina earlier.

It is not usually the norm to check pipelines for leaks in the fall. Most crews don’t operate at this time of the year as the ground is usually frozen. This year however the mild weather experienced could mean that the pipes have been shifting which indicates a potential possibility of a leak.

Around $6.5 million are being spent by SaskEnergy for this thorough check and repair of its gas lines.